Adjusted Trial Balance, Income Statement, and Memo

You are just starting an internship at a small public accounting firm. You receive a memo from the intern supervisor that outlines the assignment.

- Include one excel folder with different tabs for the adjusted trial balance, the income statement, and the balance sheet. A multi-step income statement and a classified balance sheet.
- Write a memo.
- You will need to add appropriate accounts in order to make the adjusting entries. Some adjustments will require you to add two accounts, others only one.

Prepare adjusting entries, an adjusted trial balance and financial statements for Summertime for 2014. Please start by putting the accounts in chart-of-accounts order and splitting the amounts between debits and credits. You will need the following information to make the adjusting entries.
- Bad debt expense is expected to be 1% of sales for the year
- Depreciation expense for the year is $5,000
- Summertime issued the 6% note payable on July 1, 2014, and interest is payable each June 30th thereafter.
- Summertime issued the 9% note receivable on March 1, 2014 and expects to receive payment of both the interest and principle on March 1, 2015.
- Employees have earned $6,200 in salaries that will be paid in January.
- Two-thirds of the unearned rent revenue was earned in 2014.
- The income tax rate is 30% and will be paid in January.